US Westlake makes $1bn bid to acquire Georgia Gulf

HOUSTON (ICIS)--Westlake Chemical has made a $30/share (€23/share) bid valued at more than $1bn (€780m) to acquire all outstanding shares of Georgia Gulf, the US chemicals firm said on Friday.

?xml:namespace>Westlake said it first approached GeorgiaGulf on 20 September with its proposal.

However, GeorgiaGulf has been “unwilling to provide us with information that would allow us to explore these opportunities or to enter into substantive discussions,” Westlake added.

Georgia Gulf did not immediately return a call seeking comment.

Georgia Gulf had nearly 34m outstanding shares, according to a regulatory filing made in March, 2011.

Westlake said its bid reflects a 51% premium to GeorgiaGulf’s 30-day volume-weighted average share price of $19.82, and a 66% premium to GeorgiaGulf’s volume-weighted average closing share price of $18.02 since the initial offer from 20 September.

Georgia Gulf's shares were up $8.81 to $33.29/share at 09:49 hours New York time (14:49 hours GMT).

Westlake, which already holds 4.8% of GeorgiaGulf’s shares, said its all-cash proposal is not subject to financing conditions.

Westlake added that it sent on Friday a letter to GeorgiaGulf’s board, urging the board “to act in the best interests of its shareholders by meeting with us to seriously discuss our compelling proposal".

“As such, we are surprised and disappointed that GeorgiaGulf’s management has been unwilling to engage in substantive discussions with us,” Chao added.

“Acquiring GeorgiaGulf would enable Westlake to become a leading polyvinyl chloride (PVC) resins producer and vinyl-based building products supplier, and would provide Westlake with opportunities to expand its global product offerings,” the company said.

In its letter, Westlake said it would prefer a negotiated transaction with GeorgiaGulf, but stated that making the offer public to GeorgiaGulf's shareholders “was now necessary”.

“We have decided to make the terms of our all-cash proposal public. Given the significant premium and near term liquidity, we are confident that GeorgiaGulf's stockholders will enthusiastically embrace it,” Westlake said in its letter.

Westlake said it retained Deutsche Bank Securities and Morgan Stanley as its financial advisors.

Georgia Gulf and Westlake plant production capacities according to ICIS plants and projects, in tonnes per year.